1. What is IRS Deductible Share?

The IRS Deductible Share represents the portion of a bill that can be claimed as a business expense for tax purposes when splitting costs between business and personal use. This calculation helps determine legitimate business deductions.

2. How Does the Calculator Work?

The calculator uses the IRS deductible share formula:

Where:

• \( \text{Deductible Share} \) — Amount eligible for business deduction (currency)
• \( \text{Business Portion} \) — Decimal representing business use (0-1)
• \( \text{Total Bill} \) — Full amount of the expense (currency)

Explanation: The formula calculates the exact dollar amount that can be deducted by multiplying the total expense by the percentage used for business purposes.

3. Importance of Calculating Deductible Share

Details: Accurate calculation ensures proper tax reporting, maximizes legitimate deductions while avoiding audit risks from over-claiming business expenses.

4. Using the Calculator

Tips: Enter total bill amount in dollars, business portion as decimal (e.g., 0.75 for 75%). Both values must be valid (bill > 0, portion between 0-1).

5. Frequently Asked Questions (FAQ)

Q1: What expenses can be split this way?
A: Common examples include meals, travel, home office, and vehicle expenses where there's both business and personal use.

Q2: How should I determine the business portion?
A: Use reasonable methods like time logs for home office, mileage records for vehicles, or documented business purpose for meals.

Q3: Are there special rules for meals?
A: Yes, meal deductions are generally limited to 50% of the business portion (100% temporarily for 2021-2022 due to COVID relief).

Q4: What documentation is needed?
A: Maintain receipts, records of business purpose, and documentation showing how you calculated the business portion.

Q5: Can I deduct the full amount if business use is over 50%?
A: No, you can only deduct the actual business portion, regardless of percentage. The 50% rule for meals is a separate limitation.